TD Cowen cuts DraftKings stock price target to $53

On Monday, TD Cowen analyst Lance Vitanza adjusted the price target on DraftKings Inc. (NASDAQ:DKNG) stock, reducing it to $53.00 from the previous $55.00. Despite this change, Vitanza sustained a Buy rating on the company’s shares. With a market capitalization of $19.1 billion, DraftKings has shown strong revenue growth of 23% over the last twelve months, according to InvestingPro data. The platform reveals 10+ additional exclusive insights about DKNG’s performance and outlook. Vitanza’s commentary highlighted a short-term setback for DraftKings, as the company did not meet first-quarter expectations due to customer-friendly outcomes. While the company’s Financial Health Score stands at "FAIR" based on InvestingPro analysis, he noted that the underlying metrics of the company remain strong.

DraftKings recently reported that it had to adjust its FY25 guidance downwards by $100 million across the board. This revision was attributed to lower-than-expected FY28 EBITDA estimates, while the valuation multiple remained unchanged. Despite current EBITDA being negative at -$217 million, analysts project the company will be profitable this year. Vitanza remains optimistic about DraftKings’ future, citing potential upside from improvements in actual hold, promotional efficiency, and internal technological capabilities.

The company has shown progress in its product offerings, particularly with a shift towards higher-margin bet types like parlays. This strategic move has increased the structural hold to 10.4%, a year-over-year rise of 60 basis points. This is in spite of the actual hold declining to 9.5% due to the volatility of sports outcomes.

Vitanza anticipates that DraftKings will continue to stand out in the market with its live betting features. The company’s proprietary content engines from partnerships with SimpleBet and SportsIQ are expected to further enhance the in-game betting experience for customers. These developments suggest that while DraftKings faced a challenging quarter, its long-term growth trajectory remains intact according to Vitanza’s analysis.

In other recent news, DraftKings Inc. reported its first-quarter earnings for 2025, revealing a revenue of $1.4 billion and an EBITDA of $103 million. These figures were slightly below consensus expectations, with revenue missing by 5% and EBITDA by 16%. Despite this, analysts from Stifel, Guggenheim, and Goldman Sachs maintained their Buy ratings on the company, with price targets set at $53, $60, and $59, respectively. Guggenheim adjusted its price target slightly down from $61, citing consumer-friendly outcomes during the NCAA Men’s Basketball Tournament as a factor in the revenue shortfall.

DraftKings revised its full-year 2025 revenue guidance to between $6.2 billion and $6.4 billion and adjusted EBITDA to between $800 million and $900 million. This adjustment reflects the company’s response to recent sports outcomes and regulatory changes. Analysts noted that DraftKings continues to demonstrate strong consumer demand and operational efficiency, with improvements in market share and promotional discipline. Additionally, the company repurchased approximately $140 million in stock, indicating a focus on returning capital to shareholders.

DraftKings’ management remains optimistic about the company’s positioning, citing resilience in online gambling during economic downturns as a positive indicator. The firm is also navigating a challenging regulatory environment, with exits from Texas and New Mexico impacting financial projections. Despite these hurdles, DraftKings has identified potential areas for growth, including improved structural hold and market expansion, supporting analysts’ continued endorsement of the stock.

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